A number of big name convenience retailers have expressed interest in purchasing CST Brands in hopes of growing their own companies.
As low profit margins sweep the nation, convenience stores across the nation move toward consolidation to find savings by growing their companies. Thus, some of the country’s biggest convenience chains are moving in on CST Brands Inc.
According to a report from Reuters, Canada’s Alimentation Couche-Tard Inc. and Japan’s Seven & I Holdings Co. Ltd. have submitted indicative offers to acquire U.S. convenience store retailer CST Brands Inc.
Couche-Tard and Seven & I, the owner of U.S. convenience store chain 7-Eleven, are competing against several other bidders for CST, including a consortium of private equity firms Blackstone Group LP and Apollo Global Management LLC, Reuters reported.
CST has announced that it will seek at least one more round of offers before deciding if the company will sell.
According to the report from Reuters, CST shares were up 17% at $44.42 in afternoon trading in New York on the news, giving the company a market capitalization of close to $3.4 billion.
CST, spun off from Valero Energy Corp in 2013, is one of the largest publicly traded fuel retailers in North America.
Based in San Antonio, Texas, CST owns and operates convenience stores and gas stations in Canada and the U.S. It also controls the general partner of gas station company CrossAmerica Partners LP.
According to Reuters, CST has been working with investment banks JP Morgan Chase & Co. and Bank of America Corp. to explore a sale after coming under pressure from activist investors JCP Investment Management and Engine Capital LP.
A sale of CST would follow similar deals in the sector. In 2014, Marathon Petroleum Corp.’s subsidiary Speedway acquired oil and gas company Hess Corp.’s retail operations and other assets for $2.82 billion, Reuters reported.
Last March, Couche-Tard closed its acquisition of The Pantry, a Cary, North Carolina-based convenience store chain, in a deal valued at $1.7 billion, including debt.
Earlier this year, CST announced the sale of 76 stores in California and three stores in Wyoming to 7-Eleven for $408 million.
